Conquer Stagflation With Dividend Stocks

With stagflation in the air, where's an investor to turn? Morningstar's Christine Benz urges a close look at companies that pay dividends.

"It can help offset some of the effects of inflation," she told CNBC.

"I do think, also, these tend to be financially strong companies -- not always, but oftentimes -- that are in a better position to weather an economic downturn."

Recommendations:

Benz's first dividend play is a bank, BB&T. Surprised?

"This is a regional bank," she explained. "This has been a hard-hit sector, but we think it's exceptionally well managed. Its loan portfolio has actually held up really well, even though most of its loans are in the hard-hit Southeast...we think there's a lot of upside there."

She also likes Diageo, which she describes as "another way to enjoy your Guinness."

"What we like is that it's kind of a back-door way to play growth in emerging markets," she said.